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Alternative Measures of Labor Underutilization in Hawaii – 2018

In 2018, the broadest measure of labor underutilization, designated U-6 (which includes the unemployed, workers employed part time for economic reasons, and those marginally attached to the labor force), was 6.1 percent in Hawaii, significantly lower than the 7.7-percent rate for the nation, the U.S. Bureau of Labor Statistics reported today. Assistant Commissioner for Regional Operations Richard Holden noted that the six alternative measures of labor underutilization in Hawaii in 2018 were not significantly different from a year ago. Nationally, all six measures had significant declines over the year. (See table 1.)

The official concept of unemployment, U-3 in the U-1 to U-6 range of measures, includes all jobless persons who are available to take a job and have actively sought work in the past 4 weeks. In Hawaii, 2.6 percent of the labor force was unemployed as measured by U-3 in 2018, significantly lower than the 3.9-percent rate for the nation. (See chart 1.) (The official measure of unemployment in states is derived using a statistical model that incorporates data from the Current Population Survey [CPS] and other sources, and this model-based estimate can differ from the direct CPS estimate discussed here.)

Hawaii had 17,700 unemployed residents in 2018 according to the CPS. In addition, there were 18,200 workers who were employed part time for economic reasons (also known as involuntary part time). These individuals were working part time because of slack work or business conditions, or because they were unable to find a full-time job. (See chart 2.) Nationwide, there were 4.8 million individuals working part time for economic reasons in 2018.

In 2018, the number of individuals considered to be marginally attached to the labor force in Hawaii was 6,100. People marginally attached to the labor force are not working but indicate that they would like to work, are available to work, and have looked for work at some time during the past 12 months even though they had not searched for work in the 4 weeks preceding the survey. In the United States, the number marginally attached totaled 1.5 million in 2018.

Discouraged workers, a subset of the marginally attached, are persons who are not currently looking for work because they believe no jobs are available for them. In 2018, there were 1,300 discouraged workers in Hawaii, accounting for about 20 percent of all marginally attached workers in the state. The U-4 measure, which adds discouraged workers to the number of the unemployed (expressed as a percentage of the labor force plus the number of discouraged workers), was 2.8 percent in Hawaii, significantly lower than the national rate of 4.1 percent.

State comparisons

In 2018, nine states had rates lower than those of the U.S. for all six measures, while three states had rates higher than those of the U.S. for all six measures. (See table 2.)

The U-4 rate includes discouraged workers; thus, the difference between U-3 and U-4 reflects the degree of would-be job-seeker discouragement. At the national level in 2018, the difference between U-3 and U-4 was +0.2 percentage point. No state had a noteworthy difference between these two measures.

The U-5 rate includes all persons who are marginally attached to the labor force, and U-6 adds those who are involuntary part-time workers. Therefore, the larger the difference between U-5 and U-6, the higher the incidence of this form of "underemployment." In 2018, all states and the District of Columbia had differences between their U-5 and U-6 rates. Connecticut had the largest gap, +3.9 percentage points. North Dakota had the smallest gap, +1.5 percentage points, indicating comparatively low degrees of underemployment. At the national level, the difference between U-5 and U-6 was +2.9 percentage points.

Relative to 2017, three states (Florida, Illinois, and Texas) experienced decreases in all six measures of labor underutilization. For each measure, rates declined over the year for at least 11 states (U-1) and as many as 13 states (U-4 and U-5). No state had a significant over-the-year rate increase in any measure.

Some states with extreme measures, either low or high, maintained their general place in the rankings of alternative measures over the year. Hawaii, New Hampshire, and Vermont all had rates among the 10 lowest for each measure in 2017 and 2018. Similarly, three states (Alaska, Louisiana, and West Virginia) and the District of Columbia all had rates among the 10 highest for each measure in both periods.

Technical Note

The U.S. Bureau of Labor Statistics (BLS) produces six measures of labor underutilization based on Current Population Survey (CPS) data. Monthly, the BLS publishes these six measures for the United States in the Employment Situation news release. (See www.bls.gov/news.release/empsit.t15.htm.) State estimates, presented as 4-quarter averages, are provided each quarter on the BLS website. (For the most recent data see www.bls.gov/lau/stalt.htm.)

The official concept of unemployment (as measured in the CPS) is equivalent to the U-3 in the U-1 to U-6 range of measures. The other measures are provided to data users and analysts who want more narrowly (U-1 and U-2) or broadly (U-4 through U-6) defined measures.

Data are calculated from quarterly tables in which the components of each measure are rounded to the nearest hundred. As a result, these measures contain slightly more rounding error than that found in typical CPS annual average tabulations (in which rates are calculated based on unrounded data). Due to small state sample sizes, neither monthly nor quarterly state data from the CPS satisfy BLS publication standards.

The unemployment rates (U-3) in this release are derived directly from the CPS, because this is the only source of data for the various components of the alternative measures. As a result, these U-3 measures may differ from the official state annual average unemployment rates. The latter are estimates developed from statistical models that greatly improve the reliability of the top-side labor force and unemployment estimates. Those models, developed by the Local Area Unemployment Statistics (LAUS) program, incorporate CPS estimates, as well as input data from other sources. The model-based estimates are accessible through the LAUS home page at www.bls.gov/lau/home.htm.

Information in this release will be made available to sensory impaired individuals upon request. Voice phone: (202) 691-5200; Federal Relay Service: (800) 877-8339.

U-5 Total unemployed, plus discouraged workers, plus all other persons marginally attached to the labor force, as a percent of the civilian labor force plus all persons marginally attached to the labor force (2)

5.3

4.8

-0.5*

3.4

3.5

0.1

U-6 Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force (2)

8.5

7.7

-0.8*

6.0

6.1

0.1

Footnotes:​(1) The U-3 rates presented are unofficial state estimates derived from the Current Population Survey (CPS). The official measure is a model-based estimate available through the Local Area Unemployment Statistics (LAUS) program at www.bls.gov/lau/data.​(2) Persons marginally attached to the labor force are those who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the past 12 months. Discouraged workers, a subset of the marginally attached, have given a job-market related reason for not currently looking for work. Persons employed part time for economic reasons are those who want and are available for full-time work but have had to settle for a part-time schedule.

Note: An asterisk indicates that the over-the-year change is statistically different at the 90-percent confidence level.